Research

Dissertation

Chapter I:

A Behavioral Theory of Firm Growth

The Quantal Response Statistical Equilibrium model (QRSE) is presented as an analytical alternative to the conventional models studying firm size and firm growth. The model is able to capture the fundamental insights brought by behavioral and evolutionary theories of the firm and fits the observed growth data very well.

Chapter II (Job Market Paper):

Dynamics of Competition and Accumulation in the US: a QRSE approach

Using the maximum entropy principle, a statistical equilibrium model is built in order to explain the distribution of the profit rates and growth rates simultaneously. The model is estimated for 1963-2019 using firm level data for the US, and the marginal frequencies for each year are recovered. Estimates suggest a decline in competitive behavior and an increase in the probability of retaining earnings.

Chapter III:

Not your average Firm: a quantile regression approach to Firm level investment

Most studies that adapt models operate on an "average firm," which is different from a firm with modal investment behavior. This study employs a Bayesian quantile regression model that finds, first, that the firms with higher investment rates have higher responsiveness to the valuation ratio and lower responsiveness to the profit rate, and second, it finds a decline in the responsiveness of the firm investment to these factors.

Publications

Business cycles, financial conditions, and nonlinearities - with Ivan Mendieta-Muñoz, https://doi.org/10.1111/meca.12363

This paper proposes a conceptualization of business cycle fluctuations in which the role of financial conditions and nonlinear dynamics are explicitly incorporated. We emphasize that the sources of instability in an economy cannot be associated exclusively with the real or financial sectors, and we incorporate the idea that financial conditions are both important sources of instability and possible nonlinear propagators of other sources of instability. We test the propagation mechanisms of such conceptualization using a Bayesian Threshold Vector Autoregression model for the US economy.

Work In Progress

A Multi-Agent Statistical Equilibrium Model of Tobin's q - with Ellis Scharfenaker

We model the dimensions of decision making that give rise to statistical regularities in Tobin's q. Both the stock market speculators and the firm manager observe the Tobin’s q and take actions, yet it is only the manager that can control the firm’s capital stock and it is mostly the stock market speculators that determine the value of a firm’s stock. We incorporate the manager's and speculator's decision process explicitly to analyze the accumulation process for publicly-traded US firms.

Research Statement

Research Statement.docx